A new congressional majority in 2007 promised a clean break from past practices of a Congress noted for its corruption, dysfunction and profligacy. It moved on a modest agenda and successfully enacted a few important policies, but overall, it failed to chart a new direction in fiscal policy.

This failure was due in large part to the majority underestimating the ability and willingness of a coalition of conservative policymakers and the president to fiercely obstruct even the modest reform policies on the new Congress’ agenda.

2007’s successes were important. Congress raised the minimum wage for the first time in 10 years. It vastly improved student loan programs and began to exercise increased oversight of the executive branch. Earmarks are now more transparent and will likely, for good or for ill, be far fewer in number. Perhaps most importantly, it established PAYGO (pay as you go) budgeting rules and passed a budget resolution on time.

But overall, Congress missed opportunities to turn a corner on fiscal responsibility, taxation, and budget policy. It appears to be wavering on its promises to follow PAYGO rules and did not enact any of the modest expansions in federal investments it proposed, despite strong bipartisan majorities in favor of many of those proposals. And it failed to address the inadequacy of long-term revenues or the stigma often attached to taxation and government investments.

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So 2007, much like 2006, belonged to a coalition of conservative Republicans in the House and Senate and a very unpopular president, who together fought back modest, fiscally responsible improvements in the tax code and sensible government investments. This coalition’s obstruction ensured the new Congress would govern much like the last one, stuck in neutral or moving backward on fiscal policy. ... Here’s to better results in 2008.

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